Lecture Notes - Unit 1, Introduction To Management And Organisations PDF

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UNIT 1 INTRODUCTION TO MANAGEMENT AND ORGANISATIONS

Importance of Management Management is essential in all organised efforts, be it a business activity or any other activity. Principles of management are now universally used not for managing business organisation, they are also applied to various other type of organisations, such as educational, social, military and Government. Management is a critical element in the economic growth of a country. By bringing together the four factors of production management men, money, material, and machines enables a country to experience a level of economic development. Peter Drucker rightly observes that without management, a country’s resources of production remains resources and never become production. Management is the dynamic, life-giving element in every organisation. It is the element that coordinates current organisational activities and plans future ones. In the words of Claude S. George, management is “the central core of our national as well as personal activities, and the way we manage ourselves and our institutions reflects with alarming clarity what we and our society will become.” Definition Management is a wide term. It is described as an “activity”, a “process”, and a “group of people” vested with the authority to make decisions.  According to Mary Parker Follett, management is the “art of getting things done through people.”  According to George R.Terry,management as a process”consist of planning, organising, actuating and controlling, performed to determine and accomplish the objectives by the use of people and resources”.  According to Louis Allen,”Management is what a manager does”.  According to Henry Fayol,”to manage is to forecast and plan, to organise, to command, to coordinate, and to control”.  According to James D.Mooney and Allan C.Reiley,”management is the art of directing and inspiring people”.

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 According to Harold Koontz, “Management is an art of getting things done through and with the people in formally organized groups. It is an art of creating an environment in which people can perform and individuals and can co-operate towards attainment of group goals”. Management is the process of reaching organizational goals by working with and through people and other organizational resources. Management Functions The four basic management functions that make up the management process are described in the following sections:  Planning  Organizing  Influencing  Controlling. Planning Planning involves choosing tasks that must be performed to attain organizational goals, outlining how the tasks must be performed, and indicating when they should be performed. Planning activity focuses on attaining goals. Managers outline exactly what organizations should do to be successful. Planning is concerned with the success of the organization in the short term as well as in the long term. Organizing Organizing can be thought of as assigning the tasks developed in the planning stages, to various individuals or groups within the organization. Organizing is to create a mechanism to put plans into action. People within the organization are given work assignments that contribute to the company’s goals. Tasks are organized so that the output of each individual contributes to the success of departments, which, in turn, contributes to the success of divisions, which ultimately contributes to the success of the organization.

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Influencing Influencing is also referred to as motivating, leading or directing. Influencing can be defined as guiding the activities of organization members in the direction that helps the organization move towards the fulfillment of the goals. The purpose of influencing is to increase productivity. Human-oriented work situations usually generate higher levels of production over the long term than do task oriented work situations because people find the latter type distasteful. Controlling Controlling is the following roles played by the manager:  Gather information that measures performance  Compare present performance to pre established performance norms.  Determine the next action plan and modifications for meeting the desired performance parameters. Controlling is an ongoing process. Role of Managers To meet the many demands of performing their functions, managers assume multiple roles. A role is an organized set of behaviours. Henry Mintzberg has identified ten roles common to the work of all managers. The ten roles are divided into three groups.  Interpersonal  Informational  Decisional The performance of managerial roles and the requirements of these roles can be played at different times by the same manager and to different degrees depending on the level and function of management. The ten roles are described individually, but they form an integrated whole. Interpersonal Roles The interpersonal roles link all managerial work together. The three interpersonal roles are primarily concerned with interpersonal relationships.  Figurehead Role: The manager represents the organization in all matters of formality. The top level manager represents the company legally and socially to those outside of the organization. The supervisor represents the

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work group to higher management and higher management to the work group.  Liaison Role: The manger interacts with peers and people outside the organization. The top level manager uses the liaison role to gain favours and information, while the supervisor uses it to maintain the routine flow of work.  The leader Role: It defines the relationships between the manger and employees. Informational Roles The informational roles ensure that information is provided. The three informational roles are primarily concerned with the information aspects of managerial work.  Monitor Role: The manager receives and collects information about the operation of an enterprise.  Disseminator Role: The manager transmits special information into the organization. The top level manager receives and transmits more information from people outside the organization than the supervisor.  Spokesperson Role: The manager disseminates the organization’s information into its environment. Thus, the top level manager is seen as an industry expert, while the supervisor is seen as a unit or departmental expert. Decisional Roles The decisional roles make significant use of the information and there are four decisional roles.  Entrepreneur Role: The manager initiates change, new projects; identify new ideas, delegate idea responsibility to others.  Disturbance Handler Role: The manager deals with threats to the organization. The manager takes corrective action during disputes or crises; resolve conflicts among subordinates; adapt to environmental crisis.  Resource Allocator Role: The manager decides who gets resources; schedule, budget set priorities and chooses where the organization will apply its efforts.

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 Negotiator Role: The manager negotiates on behalf of the organization. The top level manager makes the decisions about the organization as a whole, while the supervisor makes decisions about his or her particular work unit. Managerical skills Managers at every level in the management hierarchy must exercise three basic types of skills: technical, human, and conceptual. All managers must acquire these skills in varying proportions, although the importance of each category of skill changes at different management levels. Technical skills  Technical skills refer to the ability and knowledge in using the equipment, techniques and procedure involved in performing specific tasks.  These skills require specialized knowledge and proficiency in the mechanics of a particular.  Technical skills lose relative importance at higher levels of the management hierarchy, but most top executives started out as technical experts. Human skills  Human skills refer to the ability of a manager to work effectively with other people both as individual and as members of a group.  Human skills are concerned with understanding of people.  These are required to win cooperation of others and to build effective work teams. Conceptual skills  Conceptual skills involve the ability to see the whole organization and the interrelationships between its parts.  These skills refer to the ability to visualize the entire picture or to consider a situation in its totality.  These skills help the managers to analyze the environment and to identify the opportunities.  Conceptual skills are especially important for top-level managers, who must develop long-range plans for the future direction of their organization.

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Evolution of Management Thought The practice of management is as old as human civilization. The ancient civilizations of Egypt (the great pyramids), Greece (leadership and war tactics of Alexander the great) and Rome displayed the marvellous results of good management practices. The origin of management as a discipline was developed in the late 19th century. Overtime, management thinkers have sought ways to organize and classify the voluminous information about management that has been collected and disseminated. The different approaches of management are,  Classical approach,  Behavioural approach,  Quantitative approach,  Systems approach,  Contingency approach. The Classical Approach The classical approach is the oldest formal approach of management thought. Its roots pre-date the twentieth century. The classical approach of thought generally concerns ways to manage work and organizations more efficiently. Three areas of study that can be grouped under the classical approach are scientific management, administrative management, and bureaucratic management. The Behavioural Approach The behavioural approach of management thought developed, in part, because of perceived weaknesses in the assumptions of the classical approach. The classical approach emphasized efficiency, process, and principles. Some felt that this emphasis disregarded important aspects of organizational life, particularly as it related to human behaviour. Thus, the behavioural approach focused on trying to understand the factors that affect human behaviour at work. The Quantitative Approach The quantitative approach focuses on improving decision making via the application of quantitative techniques. Its roots can be traced back to scientific management. (i) Management Science (Operations Research)

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Management science (also called operations research) uses mathematical and statistical approaches to solve management problems. It developed during World War II as strategists tried to apply scientific knowledge and methods to the complex problems of war. Industry began to apply management science after the war. (ii) Production and Operations Management. This approach focuses on the operation and control of the production process that transforms resources into finished goods and services. It has its roots in scientific management but became an identifiable area of management study after World War II. It uses many of the tools of management science. Operations management emphasizes productivity and quality of both manufacturing and service organizations. Systems Approach The simplified block diagram of the systems approach is given below. The systems approach focuses on understanding the organization as an open system that transforms inputs into outputs. The systems approach began to have a strong impact on management thought in the 1960s as a way of thinking about managing techniques that would allow managers to relate different specialties and parts of the company to one another, as well as to external environmental factors. The systems approach focuses on the organization as a whole, its interaction with the environment, and its need to achieve equilibrium. Contingency Approach The contingency approach focuses on applying management principles and processes as dictated by the unique characteristics of each situation. It emphasizes that there is no one best way to manage and that it depends on various situational factors, such as the external environment, technology, organizational characteristics, characteristics of the manager, and characteristics of the subordinates. Contingency theorists often implicitly or explicitly criticize the classical approach for its emphasis on the universality of management principles, however, most classical writers recognized the need to consider aspects of the situation when applying management principles.

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Organization and Environmental Factors An organization is a group of people intentionally organized to accomplish a common or set of goals. Types of Business Organizations (i)Sole Proprietorships The vast majority of small business starts out as sole proprietorships very dangerous. These firms are owned by one person, usually the individual who has day-to-day responsibility for running the business. Sole proprietors own all the assets of the business and the profits generated by it. They also assume "complete personal" responsibility for all of its liabilities or debts. In the eyes of the law, you are one in the same with the business. (ii)Partnerships In a Partnership, two or more people share ownership of a single business. Like proprietorships, the law does not distinguish between the business and its owners. The Partners should have a legal agreement that sets forth how decisions will be made, profits will be shared, disputes will be resolved, how future partners will be admitted to the partnership, how partners can be bought out, or what steps will be taken to dissolve the partnership when needed. (iii)Corporations A corporation, chartered by the state in which it is headquartered, is considered by law to be a unique "entity", separate and apart from those who own it. A corporation can be taxed; it can be sued; it can enter into contractual agreements. The owners of a corporation are its shareholders. The shareholders elect a board of directors to oversee the major policies and decisions. The corporation has a life of its own and does not dissolve when ownership changes. (iv)Joint Stock Company Limited financial resources & heavy burden of risk involved in both of the previous forms of organization has led to the formation of joint stock companies these have limited dilutives. The capital is raised by selling shares of different values. Persons who purchase the shares are called shareholder. The managing body known as, Board of Directors, is responsible for policy making important

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financial & technical decisions. There are two main types of joint stock Companies Private limited and Public limited company. -This type company can be formed by two or more persons. Te maximum number of member ship is limited to 50. In this transfer of shares is limited to members only. The government also does not interfere in the working of the company. -It is one whose membership is open to general public. The minimum number required to form such company is seven, but there is no upper limit. Such company’s can advertise to offer its share to general public through a prospectus. These public limited companies are subjected to greater control & supervision of control. (v)Public Corporations A public corporation is wholly owned by the Government centre to state. It is established usually by a Special Act of the parliament. Special statute also prescribes its management pattern power duties & jurisdictions. Though the total capital is provided by the Government, they have separate entity & enjoy independence in matters related to appointments, promotions etc. (vi)Government Companies A state enterprise can also be organized in the form of a Joint stock company; A government company is any company in which of the share capital is held by the central government or partly by central government & party by one to more state governments. It is managed b the elected board of directors which may include private individuals. These are accountable for its working to the concerned ministry or department & its annual report is required to be placed ever year on the table of the parliament or state legislatures along with the comments of the government to concerned department. Classification of Environmental Factors On the basis of the extent of intimacy with the firm, the environmental factors may be classified into different types namely internal and external.

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Internal Environmental Factors The internal environment is the environment that has a direct impact on the business. The internal factors are generally controllable because the company has control over these factors. It can alter or modify these factors. The internal environmental factors are resources, capabilities and culture. External Environment Factors It refers to the environment that has an indirect influence on the business. The factors are uncontrollable by the business. The two types of external environment are micro environment and macro environment. Trends and Challenges of Management in Global Scenario The management functions are planning and decision making. Organizing, leading, and controlling are just as relevant to international managers as to domestic managers. International managers need to have a clear view of where they want their firm to be in the future; they have to organize to implement their plans: they have to motivate those who work lot them; and they have to develop appropriate control mechanisms. Planning and Decision Making Planning and Decision Making in a Global Scenario To effectively plan and make decisions in a global economy, managers must have a broad based understanding of both environmental issues and competitive issues. They need to understand local market conditions and technological factor that will affect their operations. At the corporate level, executives need a great deal of information to function effectively. Which markets are growing? Which markets are shrinking? Which are our domestic and foreign competitors doing in each market? They must also make a variety of strategic decisions about their organizations. Organizing Organizing in a Global Scenario Managers in international businesses must also attend to a variety of organizing issues. For example, General Electric has operations scattered around the globe. The firm has made the decision to give local managers a great deal of responsibility for how they run their business. In contrast,

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many Japanese firms give managers of their foreign operations relatively little responsibility. As a result, those managers must frequently travel back to Japan to present problems or get decisions approved. Managers in an international business must address the basic issues of organization structure and design, managing change, and dealing with human resources. Leading Leading in a Global Scenario We noted earlier some of the cultural factors that affect international organizations. Individual managers must be prepared to deal with these and other factors as they interact people from different cultural backgrounds .Supervising a group of five managers, each of whom is from a different state in the United States, is likely to be much simpler than supervising a group of five managers, each of whom is from a different culture. Managers must understand how cultural factors affect individuals. How motivational processes vary across cultures, how the role of leadership changes in different cultures, how communication varies across cultures, and how interpersonal and group processes depend on cultural background. Controlling Controlling in a Global Scenario Finally, managers in international organizations must also be concerned with control. Distances, time zone differences, and cultural factors also play a role in control. For example, in some cultures, close supervision is seen as being appropriate, whereas in other cultures, it is not like wise, executives in the United States and Japan may find it difficult to communicate vital information to one another because of the time zone differences. Basic control issues for the international manager revolve around operations management productivi...